The Essential Personal Finance Articles 2010

Post written by Sherin Dev

Money Hacker just celebrated its successful 3rd birthday with full of joy. I have started ‘Money Hacker’ finance blog with just one subscriber and now it crossed the mark of 1300+ direct subscribers and 10000+ combined fan base in Twitter and Facebook. I consider this as a big success with a blog covers serious topics like personal finance, where a small community, but intelligent people, only interested to read. I have crossed the mark of 750+ blog articles where received huge number of guest articles from well reputed writers around the globe.

Year 2010 was fantastic for me. I have enjoyed lots of things. Some of them I would like to share with readers to inspire them on how to achieve resolutions set for the year:

- Formed my own Investment Club initially named ‘Associated Investment Partners’, focuses to invest in stocks using value approach.

- I have completed my personal investment framework by taking ideas from authentic and un-authentic investment guides available in the market.

- I have created my own investment books library which includes 20 Wiley Investment Classics and other authentic and un-authentic investment guides.

- Started earning steady income from my blog ‘Money Hacker’

- More overall, I have tried best to share all the knowledge to the readers of Money Hacker

The Essential Money Hacker Personal Finance Articles of 2010

1. How they lost their Rolls Royce in Wall Street? A Counsel to 20 Deadly Investment Mistakes
2. How to Make Your Life Financially Stable and Successful
3. Role of Family Members to Family Financial Planning Process
4. Mini Financial Plan for Standard Families
5. How to Sell De-listed Company Stocks
6. How to Become Eco Friendly and Live Green
7. The Essential Money Saving Tips for Women
8. Simple Stock Investment Idea for Utterly Confused People
9. Tested Methods to Keep Babies Safe
10. The Essential Money Saving Tips for Garden
11. Widely Accepted Wiley Investment Classics Books Library
12. 7 Legitimate Ways to Get Out of Debt
13. Plan to Build a New Home? Here is Your Master Check List
14. Authentic vs. Unauthentic. What investment books an Investor should select and read?

For more best of Money Hacker

1. Money Hacker's Classics for the Year 2009
2. 12 Articles to Share with You the Personal Finance Wisdom
3. Rare Articles on Personal Finance and Investment
4. Top Listed Financial Planning Articles on Money Hacker
5. A Quick Start Guide to Money Hacker - A Guided Tour

Convinced? Join Money Hacker in Twitter or FaceBook to a good start up of 2011

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Lenders, Not Consumers, Benefit From The Current Credit System

Editor's note: This is a guest article from Paul Maher of MyCreditRepairTips

As has always been the case, the current credit system (no matter the type of loan or credit extended) definitely weighs in the lender’s favor. They determine the rates, terms and specifics of a loan. And of course, they have the final say as to whether you get a loan or not. They measure the amount of risk involved and write a loan that minimizes their risk—at the consumer’s expense.

For larger loans such as a mortgage or car loan, creditors take extensive measures to protect themselves. Such loan contracts can be lengthy and detailed, giving the creditor the advantage on a number of counts.

Such items as penalties and fees for late payment are designed not only in an attempt to keep the consumer making their payments on time, to the lender, these funds are used to replace the money they may lose through the defaulting of other contracts. However, if the amount of defaults they experience is low (another reason loan terms are in their favor), those late fees become income for the lender.

Another way that lenders tilt the table in their favor is by requiring those with poor or marginal credit scores to pay higher interest rates. And the difference can be substantial. While a consumer with a good credit score and credit history might pay 7% to 8%, a poor credit risk may be required to pay 11% to 32%. Over the length of the loan, particularly for loans of three years or more, the total cost of the loan can be remarkably higher.

It’s often the price that has to be paid for a poor credit score and credit history. Some companies specialize in working with consumers with marginal credit. It’s a good idea, as a general rule, to turn to such companies for help strictly if it’s your only option. There are lot of great credit repair techniques that you can find on a myriad of credit repair blogs. Many don’t think there is anything they can do about this but they don’t realize...

Errors on credit reports are very common

79% of all credit reports contain errors. More than 1/4 of them are bad enough to be denied credit.

Credit bureaus, especially the big three of Experian, Equifax and TransUnion, have a poor track record of keeping your credit reports mistake free. Problems such as a charge to an account you did not make or a debt that has been paid off still showing as unpaid happen more often than you might think.

There is a bit of irony in this in that every time a credit bureau investigates wrongful charges and information on your account, it costs them money. Thus, they will try to discourage you from continuing with your claim.

Although it would seem to be in the credit bureau’s interest to keep from introducing errors on your report, these companies continue to post wrongful information at an alarming rate. That’s why when errors appear on your credit report, no matter how minor, it’s wise to take the necessary steps to have it removed. It is easier than many realize. If you would like more tips on how to accomplish this, visit MyCreditRepairTips.com. Until next time, keep your head up and enjoy life to the fullest!

About Guest Writer
This post was written by a guest writer. If you'd like to add a guest post in Money Hacker, please check out Write for Us page for details about how YOU can share your knowledge with our community.

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Wish You all a Wonderful Xmas

My wishes to all readers and family for a Wonderful Christmas

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The World of Penny Stocks: A High Risk High Reward Investment

Editor's Note: This is a guest post submitted by Cesar Zambrano

In recent years, one of the fastest growing sectors of the equity market in terms of excitement and investor interest has been penny stocks. By standard definition, penny stocks refer to shares in a company which trade for under $5.00, but most penny stock traders tend to focus on companies that are trading for under $1 per share or even as low as fractions of a penny per share. Penny stock companies also tend to have market capitalization of less than $50 million.

As stated, one of the primary reasons traders are attracted to the world of penny stocks is because of the wild volatility that tends to characterize a penny stock’s price movement each day. Let’s put it into perspective. A medium or large cap stock may move just 1%-2% in a day, and that movement would be considered decent. Many days these stocks may not even move 1%. Now compare that with a penny stock, which has the capability of moving over 100% in a single day!

This is why penny stocks tend to attract traders who are seeking increased market volatility. A wider trading range and increased intraday volatility means there is greater opportunity for potential profit, but [and many traders do not truly take this into account] it is also means there is a greatly increased opportunity for the loss of funds. Furthermore, not only is the chance of losing significant, but losses can often be very quick and sharp.

The potential for substantial movement, both positive and negative, in a penny stock is also much more significant than in a medium or large cap stock. For example, a larger stock such as Microsoft is most likely not going to increase 100% in a year. In fact, that is nearly impossible. The reality is that Microsoft may increase only 10% or 20% in a solid year. A penny stock, on the other hand, has the potential to move that much in a few minutes!

Furthermore, if a penny stock company really takes off and finds strong market share for its product and gains traction, then its stock could literally increase 10 fold or more in a year. Conversely, Microsoft is most likely not going to go bankrupt this year. In fact, the probability of Microsoft going bankrupt this year is pretty close to 0%. Penny stocks, however, can go bankrupt in a single day, oftentimes without the slightest clue, due to inefficient business practices, mismanagement, fraud, and a host of other causes.

As you can see, penny stocks are a high risk high reward investment vehicle. Unfortunately, many scam artists and fraudulent companies are attracted to the penny stock world because of this reason. Therefore, there tends to be heavy price manipulation and rampant fraud in penny stocks. Some companies will engage in “pump and dump” schemes, which basically means a company will spread incredibly falsified and exaggerated claims about a company regarding its products, financials, and market share.

Then, they will take positions in the company’s stock before they spread the lies, and as the lies spread, investors begin falling prey to the scam and start buying the penny stocks. Soon, investors see the price rising substantially, and in fear of missing a golden opportunity, they jump in the market. Finally, the original investors will sell all of their shares and make millions of dollars, while the rest of the investors are left holding the stock of a worthless company.

The penny stock world is full of upside potential, but it is also fraught with high risk, so make sure you always conduct extensive research before investing in a penny stock company. Some forex brokers offer charting packages for equities, where a trader can track penny stock movements.

Note from Sherin Dev: This guest article deals with Penny Stock which myself considers as high risk investment. Any action from the readers on this article should be taken at their own risk. To know more about Sherin's successful investment practices and stories, follow me in Twitter or Facebook

About Guest Writer
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How to Save Money in 2011

Article by Sherin Dev; Follow me in Twitter / Facebook

Year 2011 is near to our doorsteps. To do something practically in this year, some thoughts on possible money saving would help us to have a year end with lots of balances in our savings accounts. One of the quickest ways to improve your savings is through cut down your unwanted expenses. Here are some beautiful thoughts, which are realistic and practical, on how and where to do the reductions to help you save money penny by penny in each day. If practices, this would work like magic!

Money saving is simple. Anyone can do it. While practicing, it shouldn't happen in a way that takes down the quality of our present life style. But, intelligently identify where all you can cut down expenses in various segments. I have found 10 major segments that offer huge possibilities to save money. Here are those secrets for our readers:

Save Money on Transport

Fuel price hikes happening regularly. This phenomenon puts standard families in panic when thinking about regular travel. Instead of worrying, consider this as a chance to save lots of money through using parallel solutions to travel. Consider options like public transport system for regular travel. If you are young, use bicycles to travel which even improve health. Car pooling with colleagues is one of the best solutions to save lots of money.

Save Money on Foods at work

Try to pack your lunch in each day instead of eating out while in work. Generally the prices of food items supplied to the work location would be high compare with outside. Practice of having own lunch, snacks would help us to save lots of money in each day. Take the advantage of free coffee and other drinks in the work place this cut down costs related to drinking outside.

Control Credit Card usage

Credit cards can be a good friend or an arch foe. Depend on how to deal with it. Use credit card wisely. Consider it as a money source for emergencies than using frequently for each spending. Give importance to Pay off credit card bills first in each month to avoid penalties and high interests.

Deal with Debt Carefully

Having Debts are real pain for all. It adds enormous burden to our finance and monthly budgets. Don't put your head into debt trap. Instead, work best to come out of debt before doing any financial plan. Give priority to pay the monthly debt EMIs in time to avoid further interests which lead to money lose to a great extend.

Intelligent use of electricity and water

Electricity and water are of course the costliest utilities. If not utilize carefully, it would eat major chunk of our monthly budget. If use efficiently, it work like a great friend and allows to save huge money in each month. I have already written number of article on how to deal with such utilities efficiently. Read those to learn how efficiently use these utilities.

Cut Down unnecessary Phone and utility bills

Identify vendors who offer highly competitive prices and services for phone, cable and internet connections. Always prefer to use pre-paid connections than post paid. This would make you sensitive on each call and help to save lots of money in each bill.

Find out Deal and Discounts around you

Shopping is of course an unavoidable activity and the major culprit to empty most people’s pocket in no time. When do shopping, think and act smart by identifying best deals and discounts. An advance purchase of seasonable items would help us to save lots of money. If you have little patience, you can save lots of money when shopping.

Do your exercise in home

It is highly feasible, time saving as well as money saving. Learn about exercises possible to do in home than costly gym or other places. You can save money, time, traveling expenses and even eating out expenses.

Watch movies at home

Whenever possible, rent CD's and DVD’s from local libraries to watch the movies in home. Remember, going for movies with family is a cost counting activity in the sense of ticket costs, snacks, drinks as well as travel costs.

Recycle possible items...

Never spend money on moving items from your home. Instead, recycle all possible items or sell it to the local market by an advertisement in the local newspaper. This would help us to save money as well as making some money fr

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How to Become a Successful Investor

Article by Sherin Dev; Follow me in Twitter / Facebook

Just do a search in Google with the title of this article ' How to Become a Successful Investor'. There would be huge number of articles explaining how to become a successful investor. I have gone through some of them. Yes, there is some information, but most of them diverting the subject to other areas where an investor really not required any exposure. I also wonder by not seeing any of the authors of these articles has not mentioned the most required quality of a successful investor. Having common sense is that quality and that should be the very first quality any investor should have to become a successful investor.

Here are some practices and lessons including vital steps to become a successful investor. These steps seems painful to those who want to make fast money in a fort night or within no time, but it would appear as simple and understandable to those who are really willing to become a good investor.

Basics of investing

Being an investor is very simple. All of we required to have little money in hand and access to the nearest broker or mutual fund office. Just head up to those offices and inform them that you required investing money. Rest they will do. But, don’t ask the question, what happens to this money later. You may sometime receive it back if you are lucky or may lose all the money.
Understand the only one sure thing in the investment world, 100% lose of invested money. There is no other sure thing than this. This sure thing is highly controllable by individual only, but depends on how the investor is. As mentioned earlier, common sense plays major role all over the investment career of any one. Once forgotten this rule, one would later end up with huge lose.

Know what is investing

Simple words, investing are not a game or gambling. It is only for those who have understood the term in depth along with how to invest perfectly. Investing doesn't mean making money in the next moment. Investment meant for life time with intended profit time to time. Investments are sometime like driving your car. If not drive carefully, it would either lead you to an accident or to the nearest police station.

Understand the risk and returns

A good investor should be aware about the possible risk and returns from his investments. Example, if you go to participate in a car race, what would be your immediate preparations? You will certainly prepare to save your body and life in case of any accident happens. There are huge possibilities for accidents. But, once win, huge prize money waiting for you. So, you need to prepare to avoid accidents and win the race. Understand the risk and returns in this way. If not able to take risk, your returns would be less. High risk means possible high returns and low risk means possible low returns. Investor should be able to understand the relationship between risk and returns and how it applicable when investing into stocks.

Determine the Goals

Why do you want to invest? Is it just for a time pass or just because you have excess money? Both are not appropriate to a good investor. Instead, have well clear, achievable goals. If you are not able to find any goal that justify your investment intentions, better leave back under to your blanket. Investment is not for those who like to follow the crowd or love advices from Uncle Sam.

Learn from failed investors than super investors...

Very strange yea…. Everyone loves to follow the practices of successful investors. Let them follow but you shouldn’t be the one in it. Instead, read learn from failed investors and understand the reason why they failed. This would help you to avoid similar mistakes when investing money. As a beginner investor, never pick any most successful or legend investors as your role model, but start to learn lessons from failed investors. In the real world, this would help you a lot to avoid biggest mistakes that have frequently happened and trashed multiple investors earlier. Never pick the big, but start from down.

Create your own investment intellectual framework

Intellectual framework is nothing but a set of self created rules for making investments. This can be done or must do by each intelligent investor prior entering to the market. Through reading the investment success and failures, authentic investment guides all would help to create successful frameworks. A perfect framework guide investors through the right path than wrong.

Learn from right sources

To become a successful investor, invest your time first to learn. Proper learning would help investors to analyze things to accept or avoid and build right measure confidence. Able to identify 'never' and 'must do' would shape you as a good investor. To reach to that position, one should invest considerable time to learn things first. Read biography and autobiography of legend investors like Warren Buffet and authentic writings from Philip Fisher, Benjamin Graham. Never run behind all those available guides that are not authentic. Read here to know what is authentic and un-authentic books are.

Conclusion

There would not be any spoon feed technique available to become a good investor other than one should work self by investing lots of time.

1. Have right knowledge on what it meant by the word ‘investment’. Investors must know the relationship of risks and returns associated to investments.

2. Without specific goal, making investments are baseless and useless..

3. Learn maximum about the happened investment mistakes by various people. This would late help you to avoid such costly mistakes.

4. Create your own investment intellectual framework. It is nothing but your own rules for what to do and what not..

5. Read only Authentic books, authored by great investors like Benjamin Graham and Philip Fisher

Further read: I have listed all the possible, critical investment errors in this blog under the title of 'How they lost their Rolls Royce in the Wall street'. This would be a good starting point for readers.

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How to Profit from Short-Term Investments

Editor's Note: This is a guest post by Emma Martin writes of J.G. Wentworth

A lot of people think that when it comes to investing money, you have to be in it for the long haul if you want to see any kind of sustainable growth in your portfolio or a significant payoff down the line. And if you’re looking to invest in a safe and responsible manner during a stable economic era, this is probably excellent advice. However, it isn’t the only way (or necessarily even the best way) to see your money grow. Short-term investments can offer a relatively quick return, but the trade-off is that there is a higher risk involved. You have to know what you’re doing and tackle the right opportunities if you want to succeed with short-term options. There are a few things to consider before you start.

First of all, you need to understand what a short-term investment is. Generally, it’s a stock or bond that expires within a year and can be easily sold before that time is up (unlike say, a Roth IRA, 401K, or other long-term investment or retirement plan that comes with penalties for early withdrawals – or even stocks and bonds that the holder has no intention of selling because they yield dividends, for example). Some people like to think of buying a family home as a long-term investment. In this scenario, a property that you plan to flip could be considered short-term. However, for the sake of expediency, let’s just stick to stocks and bonds.

Going short-term has its benefits and drawbacks. The major benefits are earnings and liquidity. You can see large profits accumulate rapidly and sell at a moment’s notice to get them. Of course, the drawback is that you could just as easily lose it all in the blink of an eye. You need to be aware that putting your money into these types of investments is a gamble. But that doesn’t necessarily mean you can’t stack the deck a bit. Whether you’re day trading, buying futures, or collecting notes (just to name a few possibilities), you need to be careful about what you choose to invest in and keep tabs on your money situation.

Seeking the help of a professional couldn’t hurt. Although they will take a cut on every trade, it’s in their best interest to stay abreast of trends in the market in order to make you money. Also, they can keep an eye on your investments so that you don’t have to. By the same token, however, you don’t necessarily want to put all your trust in another person (look what happened to those who gave everything to Madoff). Knowing where you’re placing your money and making an effort to understand how stocks and bonds work will allow you to make informed decisions about your investments.

Further, you need to have a sense of when to hold ‘em and when to fold ‘em. Quick draw is the name of the game, so if you start losing money, be prepared to pull out fast. And if you’re earning quite a bit, don’t wait too long to sell or you may suffer a reversal of fortune. You have to be able to pull the trigger (and never look back) if you want to dabble in short-term investing. You should also spread your money around. Don’t put it all into one "miracle" stock and don’t put it all in short-term options. You can take some risks with your money, but you want to have some left for your golden years. So invest in short-term, long-term, and keep some in savings. This way if you lose in one area, you have something to fall back on.

Emma Martin writes for J.G. Wentworth, the largest purchaser of future payments to individuals who hold assets in the form of structured settlement and annuities.

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Demystifying the Credit Score

Editor's Note: This is a Guest post by Wendy Lau of New York City

A good credit score may not be top priority for young adults, but it should be. A credit score can impact many aspects of one's life. Whether you're looking for employment, looking to purchase or rent a place to live, or looking to take out a loan for a car, one's credit score can have an impact on any one of these areas.

A credit score is defined by a number that can range anywhere from 300 to 850. The higher your credit score, the better shape you're in. A high credit score can mean a lower interest rate for that car loan or home loan. It can also help a potential employer or a potential landlord develop a better impression of you. By knowing that you have a good credit score, it leads one to believe you are a responsible individual who cares about your finances.

Each credit agency has a slightly different form of evaluation, but if you have a credit score of 720 or better you are in good shape. A credit score at this level means you will likely be eligible to obtain that loan at the lowest possible rate.

Here are some of the best ways to help maintain good credit:

Pay your bills on time and in full.

Keep your debt below 10 percent of your revolving accounts.

Use your credit responsibly. When there is lack of activity on an account it does not help provide information on how well you repay debt.

Here are some of the best ways to improve your credit score:

Do not build on consecutive late payments. Lenders typically are understanding it there is one late payment, but two or more late payments signify a problem.

Pay a portion of the amount due if that is all you can afford. It is better to pay a portion than not making a payment at all.

If you are going to be late on payment, it is better to be late on one account versus several accounts.

Limit your applications for credit in a 12-month period. The more credit applications you submit, the more credit checks there are. Lenders viewing your account do not like to see many "hard inquiries," it may signify to them that you are desperate to obtain credit.

This post was written by Wendy Lau of New York City who has managed to maintain a positive credit score above 800 with all 3 major credit agencies. She is a guest blogger for My Dog Ate My Blog and a writer on accredited online colleges for Guide to Online Schools.

About Guest Writer
This post was written by a guest writer. If you'd like to add a guest post in Money Hacker, please check out Write for Us page for details about how YOU can share your knowledge with our community.

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